Weather report for NC: It’s still storming

From the way legislators have been behaving the past two years, you would think that North Carolina’s recovery from the recession has weathered the economic storm. And yet, time after time, the evidence has shown that North Carolina continues to be far from where we need to be to declare clear and sunny days.

To be clear, the Budget & Tax Center has always been an advocate for a stronger Rainy Day Fund in North Carolina. And yet, boosting contributions to the fund when core public investments are being starved is just another self-imposed limitation on lawmakers’ ability to meet pressing current needs. At each turn in the budget process the Governor, the Senate and the House, have all opted to squirrel away a little more rather than meet current needs. That’s not responsible. It’s counterproductive and short-sighted, especially since North Carolina’s Rainy Day Fund balance currently is about 3 percent of overall state operations, nearly double where it was four years ago, when it was just 1.56 percent.

Right now, the biggest threat to the state’s future is not inadequate Rainy Day Fund contributions. It’s the tax plan lawmakers passed last year, which has drastically reduced the state’s ability to invest in priorities like education, transportation and other keys to building a strong economy that creates widespread prosperity. Indeed, the revenue shortfall that lawmakers will have to contend with in the fiscal year that begins July 1 could be as high as $600 million.

Setting aside money in the Rainy Day Fund won’t do anything to fix the gap that the tax cuts have opened between available revenue and the cost of providing for the everyday needs of North Carolina families, schoolchildren and seniors. While having a strong Rainy Day Fund is nice, having a tax system strong enough to meet our needs is even more fundamental.